The annual investment limit for a VCT and EIS investing in a qualifying company has been revised down to £5m, after it was announced in last year’s Budget that it would be increased to £10m.
In last year’s Budget statement, Chancellor George Osborne announced the Government would raise the annual limit for qualifying investment companies by 400 per cent to £10m for both vehicles.
Hargreaves Lansdown investment manager Ben Yearsley says: “You have to remember where the investment limit is coming from. It was being increased from £1m to £10m. £5m is a still very workable amount for a VCT manager to work with.”
The Government also reiterated its stance revealed in the Autumn Statement to introduce a disqualifying purpose test to exclude companies set up for the purpose of accessing relief, bar EIS and VCTs from investing in some feed-in tariff businesses and a qualifying company from acquiring shares in another company.
The statement said: “For both EIS and VCTs the Government will also introduce a new disqualifying purpose test to exclude companies set up for the purpose of accessing relief, exclude acquisition of shares by a qualifying company in another company and exclude investment in some Feed-in Tariff businesses.”